When Sen. Dennis DeConcini met with the nation's top thrift regulator in 1987, he made references to a memo that proposed a deal favorable to S&L owner Charles H. Keating Jr., according to a sworn statement before the Senate Ethics Committee.
The question of whether the Arizona Democrat actually offered a deal on Keating's behalf is crucial to the ethics investigation of DeConcini and four Senate colleagues.DeConcini has repeatedly denied making such an offer. The sworn statement, given by someone who did not attend the 1987 meeting, says only that DeConcini made "verbal references" to a memo outlining a proposal for Keating.
The ethics committee is trying to determine whether the so-called "Keating Five" improperly pressured S&L regulators on behalf of Keating - a major political donor. The other senators are John McCain, R-Ariz., Donald W. Riegle Jr., D-Mich., Alan Cranston, D-Calif. and John Glenn, D-Ohio.
The sworn statement was given to the committee last August by Glenn's administrative assistant, Mary Jane Veno, and released last week.
According to the affidavit, Veno told the committee what she learned from DeConcini's administrative assistant about the April 2, 1987, meeting between four senators (all except Riegle) and top regulator Edwin J. Gray.
No Senate staffers attended the meeting. Veno said she was told about the memo by Gene Karp, who said Friday that his recollection of their conversation differs from hers.
The 1987 meeting is important because Gray insists that DeConcini then offered a quid pro quo on Keating's behalf.
Gray said an essential part of the offer was that Keating's Lincoln Savings and Loan would offer more home mortgages if regulators would exempt Lincoln from a rule limiting risky investments.
Committee special counsel Robert S. Bennett said in his opening statement the evidence shows that DeConcini offered the deal.
But DeConcini has denied it in the strongest possible terms. And Cranston, Glenn and McCain back him on that point.
In the sworn statement, Veno said that some time after allegations of a deal for Keating became public in late 1989, Karp called her at home. He "explained that Sen. DeConcini had brought the memorandum with him to the April 2 meeting, and during the meeting, had made verbal references to the subjects discussed in the memorandum," she told the committee.
The memorandum, dated March 19, 1987, was from DeConcini staffer Laurie A. Sedlmayr to her boss. It detailed "What American Continental (Lincoln's parent company) wants from Gray for concessions" and "What American Continental is willing to do."
Sedlmayr is to testi-fy Monday when the committee resumes its hearings.
Karp said Friday that since the 1987 meeting was held in DeConcini's office, the memo was available to the senator. But Karp said he did not know if DeConcini actually referred to it.
In an interview, Karp said he could not recall exactly what he told Veno, but "as I remember it now, Gray said at the very beginning he didn't know anything about Lincoln and DeConcini never got into the subject matter of the investigation or anything about that. Whether there was any specific reference made, I can't answer. Only the principals that were there can answer it."
Karp added that he does not recall telling Veno that DeConcini made "verbal references" to the memo and "I find it difficult to imagine that I said that."
Veno could not be reached for comment on her statement or Karp's.